Drewry: Large containership deliveries will put pressure on rates

Drewry said the container ship capacity on ultra large container vessels (ULCVs, or ships with capacity of more than 10,000 TEU) will increase by 31.4 percent this year, followed by a further 30 percent in 2015.
The London-based consultant says in its Container Insight Weekly newsletter that "even though some of the deliveries will be delayed, it is hard to see where the cargo to fill the remainder will come from, bearing in mind that the vessels are mostly designed for the Asia/Europe trade lane, where westbound cargo growth last year was less than 4 percent. It was an even lower 2 percent to Northern Europe, where average vessel size already exceeds 10,500 TEU."
Drewry notes some vessels may be delayed, but that the ability of carriers to postpone deliveries will depend on the negotiating power of the buyers that have ordered the ships. It noted that "only 34 of the 44 vessels over 10,000 TEU scheduled for delivery in 2013 actually came into service, 20 of which went into Asia/North Europe schedules.
"As cargo growth in the Asia/Europe tradelane will be inadequate to accommodate the extra vessels," it continued, "the implication is that some will have to be deployed in other tradelanes, but, were this to happen, much of their economies of scale will be lost, as ULCVs are only profitable when well utilized."
Drewry predicted, "Asia/Europe freight rates will stay under pressure in 2014 and 2015, which explains why cost cutting is so high on Maersk/MSC/CMA CGM’s agenda."